Volume 4 Number 2	August 2005
		Special Article
		Article 1
		Article 2
		Article 3
		Article 4
		Article 5
		Article 6
		Article 7
		Article 8

Weapons of Mass Upliftment:
Good Governance, Quality Education, and Sustainable Development

H.E. Fidel Valdez Ramos
Former President of the Republic of Philippines
Chairman of the Ramos Peace and Development Foundation [RPDEV]
Chairman of the Boao Forum for Asia [BFA]

Editor’s Note
The Board of Editor of the AIUB Journal of Business and Economics [AJBE] takes pride to publish the speech of H.E. Fidel Valdez Ramos, Former President of the Republic of Philippines; Chairman, Ramos Peace and Development Foundation (RPDEV) and the Boao Forum for Asia (BFA) for its current issue. The speech titled “Weapons of Mass Upliftment: Good Governance, Quality Education and Sustainable Development” was delivered in a seminar arranged by De Las Salle University-Dasmariñas in January 2005. Mr. Ramos, in this speech, mentioned that without good governance and quality education, a nation can never achieve sustainable development. The present scenario of Bangladesh has also supported the very essence of Mr. Ramos’s argument. In, fact, lack of good governance and quality education lead Bangladesh to a fail state in attaining sustainable development. To combat our adverse situation, we should pay attention to some of brain storming suggestions given in the speech.

… Dr. Carmen Z Lamagna
Vice Chancellor of AIUB
Editor of AJBE

Microcredit and Microentrepreneurship:
An Extension of Schumpeter’s Five-factor Model

Wali I. Mondal
Professor
School of Business and Management
National University, USA

Abstract
Microcredit, a group-based system of collateral free credit delivery and savings mobilizing scheme is especially designed to meet the unique financial requirement of the poor. The original model of microcredit dates back to 1905 when Rabindranath Tagore introduced a group-based lending model for the poor without collateral. Now 60 countries of the world are using one or more models of microcredit. According to the original model, a small loan is approved for one client of a group of five and the whole group is made responsible for it. New models have since evolved which do not require group formation for collateral-free lending. One positive consequence of the microcredit model has been the development of the microentrepreneur class in poor countries. The paper, for the first time, applies Schumpeter’s five factors of entrepreneurship to analyze the microentrepreneurs of Bangladesh. It concludes with case studies of two successful microentrepreneurs.

An Application of the Box-Cox Transformation

Ifa Rushdi
Lecturer of Economics [on leave]
Faculty of Business Administration
American International University-Bangladesh [AIUB]

Abstract
This paper shows that the common market model which is a counterpart of the Capital Asset Pricing Model can give us biased estimates since an assumption of linearity is applied. Using Likelihood ratio tests it was found that when the market model is transformed by Box-Cox transformation technique and the lambda parameter is estimated by MLE, the lambda statistics is significantly different from the lambda statistics when the model is restricted to be linear or log-linear. Using MSE it was also found that Box-Cox transformed model was better at forecasting than the classical market models.

Labor Productivity and Wastage:
The Two Sides of a Coin-Bangladeshi RMG Perspective

Abu Yousuf Md. Abdullah
Assistant Professor
Institute of Business Administration [IBA]
University of Dhaka, Bangladesh

Abstract
The Post Multi Fiber Agreement situation is now imminent. This situation is going to act as an acid test for certain countries which had been engaged in ready made garments exporting under various facilities such as GSP, quota etc. Bangladesh has been one of the lucky countries, which had been allowed protected quota in the US market, which is the biggest and also had been, allowed GSP facilities in the EU market- the second largest market in the world. However, those facilities are soon to be withdrawn as agreed upon. So, all we are left with is to help ourselves by being more productive and acquiring the necessary skills to go for the production of high value readymade garment products. This journal focuses on the wastage and the productivity rates of Bangladeshi readymade garment factory workers in T-shirt manufacturing.

Review Studies on Rural Poverty of Bangladesh Extension

Nurun Nahar
Ph.D. Student, Department of Knowledge System Science
Graduate School of Knowledge Science
Japan Advanced Institute of Science and Technology, Japan

Abstract
This study presents an overview of different approaches to rural poverty estimation in Bangladesh. Head-count ratio data from different researchers are compiled. In calculating the head-count ratio the researchers have critically considered ‘the level and structure of real income’, ‘balanced nutrition’, ‘labour force and employment status’, ‘impact of credit’ and ‘political context’ of rural households. Overall magnitude in rural poverty in the last 30 years was found to be reduced by “1 percentage point decline per year”. There are differences in methodology and assumptions about the minimum calorie requirement for survival, items included in the normative minimum diet, and the use of income distribution databased on household income rather than income per capita. There exists debate among researchers regarding the current poverty situation.

Problems Encountered by the Peasants in Bangladesh in
Practicing Agricultural and Green Marketing

Hossain Mohammed
Assistant Professor of Marketing
Faculty of Business Administration
American International University-Bangladesh [AIUB]
Zukhruf Binth Junaid
Junior Lecturer
School of Liberal Arts & Social Science
Independent University, Bangladesh [IUB]

Abstract
This paper aims to identify the difficulties of practicing agricultural and green marketing concept in Bangladesh by the peasants. Partial practice of agricultural marketing by marginal landowner is causing environmental damages and so, affects the productivity. In order to increase the productivity and surplus and reduce the cost at the same time, the peasants are switching to different kinds of hybrid seeds and applying fertilizer extensively. This paper shows the essentiality of a proper integration of agricultural marketing and green marketing in Bangladesh. 

Re-examining Volatility Puzzle in UK Stock Market

S M Anisuzzaman
Faculty member
Faculty of Business Administration
American International University-Bangladesh

Abstract
In most of academic papers, researchers have found the presence of volatility puzzle with stock prices or any of its variants. But there exits widespread disagreement among financial economists on how to interpret this empirical anomaly. This paper is primarily all about testing volatility puzzle. To this end, Shiller’s (1981) methodology under constant discount rate model, time varying discount rate model, and a unique model of how expectations on discount rates are formed which is a reconciliatory between constant and time varying discount rates, all have been applied to the UK stock market data over 1900-2000. Moreover, to eliminate nonstationarity of stock price and dividend data derived from the above models, first difference of the log data has been employed. Results in this paper are found to be mixed in that only under the newly proposed model, variance-bound has been found. In rest of the cases, volatility puzzle has been found for actual stock prices. In case of first differenced data, same signals have been received. Lastly, a straightforward answer on the existence of market efficiency in UK could not be reached because of the joint hypothesis problem. 

Testing the Weak-form Efficiency of an Emerging Market:
Evidence from the Dhaka Stock Exchange of Bangladesh

Mir Abdul Kader
Student of BBA (Final year)
Major in Finance and Economics
North South University, Bangladesh
AFM Ataur Rahman
Assistant Professor
Department of Economics
North South University, Bangladesh

Abstract
Stock market is the most influencing factor of a country’s aggregated economy. The existence of efficiency in the stock market is an integral part to ensure its role in the country’s economy. In this paper it has been tested whether evidence of weak-form efficiency exists in Dhaka Stock Exchange or not. In this paper, time-series daily data of Dhaka stock exchange price index of last 10 years (from 1995 to 2004) has been used. To get the results, descriptive statistics and the normality test has been conducted to verify the basic property of market efficiency. To check whether any technical trading strategy yields abnormal profit or not, technical trading rule (K% filter rule) has been used. Market efficiency is very important for investors- both individual investors and institutional investors (i.e. insurance, mutual funds etc). 

Corporate Governance in Emerging Markets:
A Study of Some Selected PLCs in Bangladesh

Mohammad Shofiqul Islam
Assistant Professor of Accounting
Faculty of Business Administration
American International University-Bangladesh [AIUB]
Sharmin Jamal – Ena
LecturerDepartment of Finance
University of Dhaka, Bangladesh
Md. Abdul Mannan
Lecturer of Accounting
Department of Business Administration
Stamford University Bangladesh

In consideration of the fact that ‘corporate governance’ has increasingly become a vast area of study, the major focus of this paper has been fixed on the nature and practical implications of the aspects of the Codes of Corporate Governance for Bangladesh. This study figures out whether organizations are following the codes of the corporate governance. Prior to this, a list of well-known and reputed companies of the countries and some mediocre companies as well are examined, and thus 12 strongly and weakly performing organizations are selected for empirical study. The study observes that successful corporate governance depends to a great extent of trade-off among the various conflicting interest groups like Government, Society, Inventors, Creditors, and Employees of the organization. A thorough study of the annual reports and other related papers of the selected organizations reveals that the Bangladeshi corporate management suffers from transparency, independence in decision-making and accountability. It is identified that among the various reasons of this scenario, the important ones are absence of professionalism in management, paternal style of leadership, lack of skilled human resources, absence of dynamism in management culture and the likes. The paper concludes with some suggestions, which are considered essential for the exercise of good governance in the company management of Bangladesh such as accountability to shareholders, transparency of disclosures, quality of directors, independence in decision-makings, etc.